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Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management

City:Northbrook

State: IL



BIOGRAPHY:
At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Investing in Hedge Funds

Younger wealthy investors are more involved in alternatives such as hedge funds than older wealthy investors are.

| BY Kent McDill


For many years, hedge funds have been employed by wealthier investors to earn greater return on investment and protect against the variables that exist in the stock market. But more investors now are taking advantage of hedge funds and alternative investments to build their portfolios.

Spectrem’s new report Use of Hedge Funds and Private Equity in the Portfolios of the Wealthy examines investors with a net worth of $25 million or more, and determines how much of their investible funds they place in alternatives like hedge funds. It is reflective of the state of investing in America today and provides direction to advisors about suggesting hedge funds to investors.

Much of the study compares the $25 million plus investor to the Ultra High Net Worth investor with a net worth between $5 million and $25 million. For instance, the $25 million plus investor has 14 percent of their investible assets in alternatives to just 1 percent for the UHNW investor on average.

Among the $25 million plus investor, 42 percent own hedge funds, 53 percent are invested in private equity, 43 percent are invested in venture capital and 38 percent are invested in private placements. Among the UHNW investor, no more than 15 percent invest in any of the aforementioned alternatives.

A significant percentage of the hedge fund investments and other alternatives come from investors under the age of 56. Fifty-seven percent own hedge funds, and 65 percent are invested in private equity. For comparison, only 30 percent of investors over the age of 65 are in hedge funds and only 48 percent are in private equity.

Differences in investment in private placement between age segments is even more pronounced, with 49 percent of the younger investors invested and only 23 percent of the older investors involved with private placement.

The difference in involvement with alternatives between wealth segments is very significant. Among the UHNW investors, those with a net worth between $15 million to $25 million top out at 29 percent invested in venture capital. Only 21 percent from that wealth segment are invested in hedge funds.

However, breaking down the $25 million plus investors, 71 percent of investors with a net worth over $125 million are invested in private equity and 69 percent are invested in hedge funds. The drop-off is noticeable as wealth decreases, as only 34 percent of investors with a net worth of $25 million to $50 million are invested in hedge funds.



About the Author


Kent McDill

kmcdill@spectrem.com

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.